LONDON – Goldman Sachs abandoned the two strong dollar plays in its 2017 trading recommendations on Tuesday, pointing to the Trump administration's concerns over the strength of the currency and improvement in growth in rival economies.
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In a note to clients, analysts from the U.S. investment bank said it had put its currency forecasts in general under review and was likely to change others to reflect a flatter trajectory for the trade-weighted value of the dollar.
"The greenback still has a number of things going for it, including a healthy domestic economy, an active central bank, and lower political uncertainty compared with the UK and Euro area," they said.
"However, a number of fundamentals have changed on the margin, such that the long-Dollar story no longer warrants a place among our 'Top Trades'."
(Writing by Patrick Graham, editing by Nigel Stephenson)